Zero Motors Limited, a listed company has three manufacturing divisions: Cycle Division Motorcycle Division Electric Scooter Division. The following information is given: (Rupees in crore) Equity share capital: 300 Prefe

CS Executive · Company Law · PYQS · June 2023
Zero Motors Limited, a listed company has three manufacturing divisions: Cycle Division Motorcycle Division Electric Scooter Division. The following information is given: (Rupees in crore) Equity share capital: 300 Preference share capital: 120 General Reserve: 500 Revaluation Reserve: 200 Profit and Loss A/c (CR): 300 Long term loan: 480 Short term loan: 620 Gross revenue in last FY: 2010 Investment in Cycle division: 40 Turnover of Cycle division 450 The Board of directors of the company have decided by unanimous resolution the following in their meeting held on 31st May, 2023: To invest in trust securities the compensation received as a result of divestment of Cycle Division. Referring to the provisions of Companies Act, 2013, decide if the board resolution is sufficient for the above proposals.

Answer & Explanation:

According to Section 180 of the Act, a Special Resolution is required only in case the compensation on account of merger or amalgamation is invested otherwise than in trust securities. In the instant case, as the compensation money on account of divestment of Cycle Division was invested only in trust securities, board resolution is sufficient.

Topics: Board Powers

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